we can analyze companies and buy the ones that are doing well. i'm jim cramer, see you tomorrow. we'll come through it better than anybody else. >> they're steelworkers who hope to benefit from the stimulus package passed in congress. >> you'll see fireworks in a minute. >> the stimulus package includes a "buy american" clause, which is controversial because it says any project paid for with stimulus money can only use steel made in the u.s.a. instead of cheaper imports. >> i am a person who says there's no such thing as free trade. if you want to study it at harvard, study it at harvard. it doesn't work in the real world. it has no application. [ticking] >> they're called, among other things, millennials. there are about 80 million of them born between 1980 and 1995, and they're rapidly

taking over from the baby boomers, and their priorities are simple: they come first. >> i believe that they actually think of themselves like merchandise on ebay. "if you don't want me, mr. employer, i'll go sell myself down the street. i'll probably get more money, i'll definitely get a better experience, and, by the way, they'll adore me. you only like me." [ticking] >> across the country, thousands of perfectly sound and cozy houses are being torn down. the empty lots then get filled up with the likes of this. how has the average house size expanded since you started building houses? >> the 8,000-square-foot house, which used to be the extraordinarily large house, is now a 12,000- or 13,000-square-foot house. >> how many bathrooms in the house? [silence] >> seven. >> you had to count? >> [laughs] yeah. i was thinking five bedrooms, the pool bath, and then the powder bathroom here. >> welcome to 60 minutes on cnbc. i'm lesley stahl.

in this edition, we examine the american work force and we discover what stimulates new homebuyers. but we begin with steelworkers. steel, the so-called backbone of america, is suffering. at the beginning of 2009, steel plants across the country were hanging on for the stimulus package to kick in, with its over $100 billion for building things like highways and bridges. as i first reported in february 2009, the package included a "buy american" clause that the steel industry had fought hard for. it says any infrastructure project paid for with stimulus dollars must use steel made in the u.s.a., not cheaper imports. >> the whole purpose of your stimulus package-- and it's the right purpose-- is to stop the bleeding of jobs and to create new jobs here in america, not overseas, not in china, not in europe.

>> dan dimicco is the c.e.o. of nucor, the biggest steelmaker in the united states, with 18 plants all across the country, including this one outside blytheville, arkansas, along the mississippi river. plant manager doug jellison told us nucor has revolutionized the way steel is made. so what is this stuff? >> it could be old barges. it could be from, you know, old buildings. this stuff is, like, you know, old barrels, or you'll see some wheels. >> instead of using expensive iron ore to make steel, nucor uses mostly scrap, anything with steel, like crushed cars or old washing machines. >> we are the largest recycler in north america. >> over the last five years, this plant, like the u.s. steel industry as a whole, saw its profits soar. by mid-2008, nucor had hit an all-time high. but then things changed overnight.

just what? >> just off a cliff. >> you went from feast to famine like that? >> when the credit crisis hit, the water shut off. the flow of money shut off. it was like dominoes, boom boom boom boom boom boom boom boom. i've never seen anything like this, and no one else has in our lifetimes. >> that was in october 2008. clients, from homebuilders to carmakers, simply vanished. up till then, the plant was on all cylinders, with tons of scrap cooking round the clock, seven days a week. it's too hot. curiously, they call this a "mini mill," though there's nothing mini about it. it's a mini mill because they use a jolt from electrodes in a small furnace instead of heating a huge one with coal. it's not quite fireworks, but it's-- >> right, well, you'll see fireworks in a minute. >> the boom-- and, yes, it was scary--

happen when electricity hits the metal. the process is run from a control room called the "pulpit." the operator raises the temperature to nearly 3,000 degrees and pours the witch's brew into a cauldron. that's the steel? >> that's the steel. >> wow. the cauldron is transported to something called a caster run-out, where the molten steel is molded and cut into beams. so this'll go into the bridges and the buildings. this is it; this is steel. mini mills can make steel more cheaply than it used to be made, more quickly, and more efficiently. >> we can literally start and stop our process like you flip a light switch on and off. so we can run full out, and then if the orders back off and we need to shut down, we just turn the light switch off. >> that's what they've had to do. the phones just stopped. >> the phones just stopped.

>> nucor's employees watched helplessly as the number of new steel orders plummeted. >> it just kept droppin' and droppin' and droppin'. >> how far down did it get? did it go to zero? >> one week, we actually had a negative. >> we had negative sales because of the cancellations. >> christmas was coming around the corner. you know, guys were planning. and it just--just died. >> just boom. >> boom, all at once. >> these mounds of scrap usually clear out in a week. but this apocalyptic landscape has been sitting here just like this for months. other steel companies have dealt with the slowdown by padlocking plants and sending workers home. have you closed any of your plants? >> no. >> not one plant has closed down? >> no. >> instead, the plants are running at 50%. facilities look like ghost towns. and yet while well over 25,000 steelworkers have been laid off around the country, not a single worker at nucor has.

>> that's the big difference in us sitting here and you interviewing some other steel company, because when we go through the gate, we don't have to worry about losing our job. >> which isn't to say they aren't feeling the pain. with all of nucor's plants non-union, the salaries of its more than 20,000 employees are tied to productivity, and productivity is now half. tell us how much your pay has been cut from, say, a year ago. >> 50%. >> 50%, wow. >> about 50% to 55%. >> that's about where i am, about 50%. >> that's where i'm at also, 50%. >> now they're dipping into savings, delaying retirement, cutting back on everything from food to the collection plate at church. jeremy davis, a cold saw operator, was making $87,000 a year. >> it's bad. you've set your bills. you've set your lifestyle

around what you're making. >> right. >> and so when it's cut in half, you know, first thing you have to do is start asking yourself, you know, "where can i make cuts?" we don't go out to eat no more. you know, we cook at home. we eat peanut butter and jelly and ham sandwiches for lunch. >> as opposed to the caviar you were eating-- [laughter] >> exactly. no, we was eating turkey. >> coming up, the steel industry goes to washington. >> what we're saying is, "listen. yes, 'buy america' benefits the steel industry in the united states. absolutely." but what we're saying also is, "might that concept not also benefit the u.s. economic engine, get it started again?" >> that's ahead when 60 minutes on cnbc returns. [ male announcer ] what if you had thermal night-vision goggles,

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>> as tough as this is, guys, we'll come through it better than anybody else. >> in pep talks, nucor employees keep asking, "when will the tough times end?" is it more than a year from now? >> [sighs] >> a lot depends on the stimulus package. and i hate to rely on the government to do these things for us, but the reality is that bad, and we have no choice. >> it's not the first time steel has turned to washington. a decade ago, the industry was on its knees, with competition from cheap imports and unsustainable retirement costs. for every steelmaker on the job, the company had to pay six to eight retired workers. the industry begged for a bailout. but whatever you were asking for, washington said no. and the industry collapsed, practically. >> we had 32 steel companies-- 32--in this country

go into bankruptcy. you're talking in excess of 100,000 jobs disappearing. >> under bankruptcy, the companies shed their health care and retirement obligations. the industry bounced back because of consolidations, automation, and china. >> i would definitely say that the fact that the infrastructure was growing at the rate that it was growing in china and around the world, because of that, we had four or five really good years. >> but now steel is at the mercy of washington again. >> ...strong 'buy america' provisions. >> dimicco lobbied hard and passionately for the "buy american" clause in the stimulus package. >> what we're saying is, "listen. yes, 'buy america' benefits the steel industry in the united states. absolutely." but what we're saying also is, "might that concept not also benefit the u.s. economic

engine, get it started again?" >> you're setting up-- you're begging other countries to retaliate against us. it's-- >> it's not true. >> it's the counterargument... >> it's all garbage. >> as you well know. i'm not telling you anything-- >> well, people can say whatever they want. what we have around the world, all right, is a trade war against the united states that we have not shown up for. >> you know what? you are a protectionist. >> no, i am not a protectionist. >> well, you sound like a-- >> not in the sense of the tone that you're using. >> sounds like it. >> i am a person who says there's no such thing as free trade. free trade is an academic luxury the real world doesn't enjoy. if you want to study it at harvard, study it at harvard. it doesn't work in the real world. it has no application. >> for the united states to turn significantly inward and protectionist at this time would be like pouring gasoline on the recessionary fires that are burning. >> jim owens is the c.e.o. of caterpillar. he worries that "buy american" will end up costing more jobs than it will protect. most of these are exported.

>> yes, this is a 777 truck. in our mining truck line, this is one of the smaller trucks. this is a 100-ton truck. >> this is one of the smaller trucks. let me just show everybody the scale here. this is one of the smaller trucks. how much of your product is sold in the united states versus the rest of the world? >> if you got right down to new machine and new engine sales, it's roughly 75-25. >> 75 outside the country. >> yes. >> caterpillar made $16 billion last year by selling its heavy excavators and dump trucks overseas. because of the worldwide recession, caterpillar announced 22,000 layoffs. it's another company desperate for the infrastructure portion of the stimulus package. but it's also counting on other stimulus packages in china, south america, and europe... that is, unless they retaliate. >> if we have a "buy america" clause, other countries are going to have a "buy china," "buy europe," "buy brazil"

clause, and they're going to discriminate against our exported products. look how thick this blade is. >> wow, this is just a huge hunk of steel. 75% of the steel in caterpillar trucks is american-made. if the company can't sell its earthmovers and mining tractors overseas, it'll buy less steel.r countries look upon it as a hostile act--and we're talking about china and russia... >> we are the largest consumer in the world of chinese-made products. they need us as much as we need them. >> he says the real hostile act is china subsidizing its steel industry. in january 2009,

chinese steel plate cost half what american plate cost. dimicco claims that allows china to dump, or sell its steel below cost. taxpayers want to know why they're going to have to have their money go for something more expensive when they could get steel from china for much less. why shouldn't we get the bargain? >> it won't be cheaper from china if it's not dumped and it's not subsidized, okay? which are both illegal according to international trading practices. in today's environment, when you're running your operations at 50% of capacity, do you really think you're not going to be competitive? >> please join me in welcoming our 44th president to peoria. >> president obama visited caterpillar to promote the stimulus package. but jim owens said that even with the stimulus, he may have to lay off more workers before seeing a turnaround. and he told us any gain from domestic spending may not be enough if "buy american" triggers a global trade war.

what happens if all these countries that sell steel to us-- china, russia, brazil-- say, "okay, well, we're just not going to buy caterpillar products; we're not going to take in john deere products; we're not going to take in g.e. products"? >> the only trade war that's going on is being waged on us. and when you don't hold people accountable for playing by the rules they agreed to, that have access to your market, you're basically saying anything goes. that's garbage. that's baloney. and the american people won't stand for it. >> the "buy american" provision in the 2009 economic stimulus package requires the use of american-made steel unless that violates u.s. trade agreements. so steel from canada and europe can be used, but steel from major competitors china and russia is locked out. coming up, the new breed of american worker. >> some of them are the greatest generation. they're more hardworking. they have these tools to get things done.

they're enormously clever and resourceful. some of the others are absolutely incorrigible. it's their way or the highway. the rest of us are old, redundant, should be retired. how dare we come in? anyone over 30 not only can't be trusted, can't be counted upon to be sort of coherent. >> morley safer meets the millennials next on 60 minutes on cnbc. to the gulf,

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every gadget imaginable almost an extension of their bodies, they multitask--talk, walk, listen, and type and text. and their priorities are simple: they come first. just ask marian salzman, an ad agency executive

at j. walter thompson who's been managing and tracking millennials since they entered the workforce. >> some of them are the greatest generation. they're more hardworking. they have these tools to get things done. they're enormously clever and resourceful. some of the others are absolutely incorrigible. it's their way or the highway. the rest of us are old, redundant, should be retired. how dare we come in? anyone over 30 not only can't be trusted, can't be counted upon to be sort of coherent. >> salzman says today's manager must be half shrink and half diplomat. just take me through some of the dos and don'ts in how you must speak to this generation of young workers. >> you do have to speak to them a little bit like a therapist on television might speak to a patient. you can't be harsh. you cannot tell them you're disappointed in them. you can't really ask them to live and breathe the company, because they're living and breathing themselves, and that keeps them very busy. >> all of which has led, as you'd expect,

to a whole new industry or epidemic of consultants-- experts, they allege, in how to motivate, train, and, yes, sometimes nanny the extraterrestrials who've taken over the workplace. mary crane, who once whipped up souffles for the white house, now offers crash courses for millennials in, well, the obvious. >> as to the tattoos, just make sure they stay covered up within the office, again especially if you're going to be meeting clients. it's a perfect storm that we've created to put these people in a position where they suddenly have to perform as professionals and haven't been trained. >> basic training, like how to eat with a knife and fork or, indeed, how to work. today fewer and fewer middle-class kids hold summer jobs, because mowing lawns does not get you into harvard. >> they have climbed mount everest. they've been down to machu picchu to help excavate it. but they've never punched a time clock. they have no idea what it's like to actually be

in an office at 9:00, with people handing them work and, oh, by the way, possibly asking them to stay late in the evening or their weekends. >> crane maintains that while this generation has extraordinary technical skills, childhoods filled with trophies and adulation didn't prepare them for the cold realities of work. >> you now have a generation coming into the workplace that has grown up with the expectation that they will automatically win and they'll always be rewarded, even for just showing up. >> to what extent are you having to tell the boomers, the bosses, the 50- to 60-year-olds, "the people who got to change are you guys, not them?" >> the boomers do need to hear the message that they're going to have to start focusing more on coaching rather than bossing. if this generation, in particular, you just tell them, "you got to do this; you got to do this; you got to do this," they truly will walk. and every major law firm, every major company knows this is the future.

>> so who's to blame for the narcissistic praise hounds now taking over the office? wall street journal columnist jeffrey zaslow covers trends in the workplace and points the finger at the man who was once america's favorite next-door neighbor. >> ♪ it's a beautiful day ♪ in this neighborhood >> you got a guy like mr. rogers, fred rogers on tv. and he was telling his preschoolers, "you're special. you're special." and he meant well. but we, as parents, ran with it, and we said, "you, junior, are special, and you're special, and you're special." and for doing what? we didn't really explain that. >> but isn't this generation, particularly of middle-class kids, really quite special? aren't they, in some ways, much better than your generation, certainly mine? >> well, except when we were younger, you had a piano teacher who expected you to practice your piano and work hard at it, and the parents expected it. and now parents say, "have fun, learn the piano, practice a little bit." so there's not the expectations that they will achieve and work hard.

it's not the same work ethic. >> zaslow says that the coddling virus continues to eat away even when junior goes off to college. >> i heard from several professors who said a student will come up after class and say, "i don't like my grade, and my mom wants to talk to you. here's the phone." and the students think it's like a service. "i deserve an 'a' because i'm paying for it. what are you giving me a 'c' for?" >> today more than half of college seniors move home after graduation. it's a safety net, or safety diaper, that allows many kids to quickly opt out of a job they don't like. there once was, if not shame, a little certain uneasiness about being seen to be living at home in your mid-20s. >> not only is there no shame with it, but this is thought to be a very smart, wise economic decision. >> and dear old mom isn't just your landlord; she's your agent as well. >> career services departments are complaining about the parents who are coming to update their child's resume. and, in fact, you go to employers, and they're starting to express concern now

with the parents who will phone h.r. saying, "but my little susie or little johnny didn't get the performance evaluation that i think they deserve." >> coming up... >> we definitely put lifestyle and friends above work. no question about it. >> do you both feel that that's pretty much the way one should look at life? >> i do. >> absolutely. >> i do, yeah. >> that's next when 60 minutes on cnbc returns.

>> jason dorsey and ryan healy both make a living advising their fellow 20-somethings

on how to cope with work. ryan started a website for that purpose, and jason has written two how-to books for them. and while he admits his mother picked out his suit for this interview, his generation is not going to make the same mistakes their parents made. >> we're not going to settle, because we saw our parents settle. and we have options that we can keep hopping jobs. no longer is it bad to have four jobs on your resume in a year, whereas for our parents or even gen x, that was terrible. but that's the new reality for us. and we're going to keep adapting and switching and trying new things until we figure out what it is. >> and figuring it out takes time. sociologists tell us most americans believe adulthood begins at 26 or older and that having witnessed so many sacrifices by their parents to achieve middle-class security has had a huge impact. family and friends are the new priorities. blind careerism is beginning to fade.

>> we definitely put lifestyle and friends above work. no question about it. >> do you both feel that that's pretty much the way one should look at life? >> i do. >> absolutely. >> i do, yeah. i remember my dad getting laid off and all these things growing up. and that's 'cause they sacrificed for the company. well, the first reaction from me is, i sure don't want to do that. i'm going to be in it for me, and i'm going to make it work. >> where does this fantasy about "i'm going to find the dream job"--there's no such thing as a dream job. i mean, a few of us, like me-- [laughter] but where does this fantasy come from? >> i think we were told when we were little, "you can be anything you want." and then they went on and on-- >> big lie, right? >> big goals are great. selling a fantasy that everything's going to be perfect and peachy is not. >> i also think from-- when you're in your early 20s and you're really not responsible to a family of kids, this is the time to find the best job, the best career, you know, what you really want to do. >> and more and more businesses are responding, offering free food, fun, and flexibility to keep their employees happy. online shoe retailer zappos.com

has found that the best way of keeping employees is giving them what they want. [cheers and applause] actual work actually happens despite goofy parades, snoozing in the nap room, and plenty of happy hours. >> ♪ it's rain shoes ♪ hallelujah ♪ it's raining shoes >> motivational consultant bob nelson says companies like zappos will avoid a looming demographic crisis. >> it's harder to get people. there's going to be fewer of them to get. and if you want to keep them and get the best out of them, you sure better know what presses their buttons. >> nelson, known in the trade as "the guru of thank you," believes that the teeniest rewards pay big dividends, regardless of age and boss abuse even bigger dividends. >> i've worked with managers that have, "if we make this goal, they'll shave their head" type thing. or they'll be in the dunk tank at the summer picnic. when a senior manager's willing

to do that is, it says, "we're all in it together." >> all that togetherness comes together every year at the motivation show in chicago: acre upon acre of coaches, consultants, knickknacks, and fancy stuff. >> awards, plaques. >> if you want to say "thank you," you'd send them the steaks. >> people enjoy wine. >> rewards for a job well done, reminders to work harder. you think this would help motivate people to work harder? >> oh, it does. >> everyone loves plush toys. >> what a top-hatted lobster has to do with all this is anybody's guess. >> how about a "hallelujah"? >> but for sure, there's an almost evangelical fervor about this work philosophy: no stick, all carrots. and believe it or not, all this prodding, praising, peddling, cajoling, and psychobabble is worth $50 billion a year in business. that's $50 billion. ain't america great?

where else you find free back rubs for the deserving worker bee? what's wrong with a happy workplace and taking your time to grow up? could this be that everything is being delayed so that adolescence ends at 30, say, and middle age starts at 60, say? >> you can hope that's the case. but while we're having this delayed adolescence, are we getting behind as an economy and as a workforce because we're just all playing computer games at work while we wait to grow up? >> for all the complaining, dorsey and healy believe their generation will transform the office into a much more efficient, flexible, and, yes, nicer place to be. >> thank you. have a good one. >> but until then, a message to bosses everywhere: just don't forget the praise. >> we want to hear it, and truly we'd love for our parents to know. there's nothing better than mom getting that letter saying, you know, "ryan did a great job. yeah, i just wanted to let you know you raised a fantastic son." >> send it to grandma too.

[laughter] >> since our report first aired, the great recession has significantly impacted the labor market for millennials. at the end of 2010, the unemployment rate in the u.s. for eligible workers under 30 was at its highest level in 60 years. but it's been widely reported that for many millennials, that sobering statistic only confirms their notion that the business-as-usual ethic doesn't work. and despite high unemployment levels in 2010, this remarkably tech-savvy generation made up 14% of the american workforce. naturally, that number will continue to rise. coming up, there goes the neighborhood. >> bought a house in a country, in a county, and in a town that believed in freedom, not in a town that wants to legislate taste; to

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>> the joneses, that mythic family america vainly tries to keep up with, is setting

an impossible standard. it's not just their fancy vacations, designer clothes, their swimming pools, and their growling s.u.v.s. it's the house, damn it. the size of the average new house in this country has grown almost 50% in the last 30 years, while the average family has shrunk. as morley safer reported in 2005, houses were growing like some alien weed from sea to shining sea. >> no, this is not the aftermath of katrina. it is the prelude to a monster. across the country, thousands of perfectly sound and cozy houses are being torn down. the empty lots then get filled up with the likes of this. the maryland town of chevy chase has become divided over size. pat rich has seen eight tear-downs on her street, including the house next door. you have a pet name

for this one, yes? >> yes, walmart. >> [laughs] "walmart." what do you make of these? >> i just don't know why people need that much space, because it's not as though everybody has a lot of children. coming in here are two people. >> two people in this. >> yes. >> the riches have been offered $1 million for the house they paid $19,500 for back in 1960. one builder's offer included a sob story. >> well, we had one who said that he had this mother who was ailing and wanted to move her to a nice, small house so he could be close to her. i think she'd last about a month, and the house would come down. >> chevy chase finally decided to put a temporary moratorium on all tear-downs. >> my name is greg bitz. >> this man was caught just as he was plotting destruction. >> i bought a house in a country, in a county, and in a town that believed in freedom, not in a town that wants to legislate taste; to rule what, where, when,

and how people can do things to their homes that they have invested, in some cases, their life savings. >> mr. bitz paid $726,000 for a house he wanted to tear down. but mr. bitz has been blitzed. this house, which you bought a couple of years ago, how big is it? >> it's 1,100 square feet on the first and second floor combined. >> and the house you want to put in its place? >> probably be a little more than 3,000 square feet on both floors. >> so triple the size, more or less? >> almost triple the size. >> what do you think is really behind this resistance to larger houses? >> i think one of the factors is jealousy or the haves and the have-nots. you have people that already live in homes that they're comfortable in. perhaps they can't afford to remodel. >> it can fairly be said, i suppose--or these people would say--"look, it's nobody's business, what we do with our land." >> mm-hmm. >> correct? >> to a point,

except you're really changing the whole atmosphere of the town. >> a few blocks away, keith blizzard has seen 7 of 11 houses on his block succumb to the wrecking ball, one replaced by... what do you call it? >> i call it battleship galactica. >> you really get a sense, from over here, of the depth of this house. >> right, it goes back twice as far as the newer house on the right. >> and that's a new house. >> completed less than a year ago. they just get bigger and bigger every year. >> those joneses again. they're everywhere, in old communities and new developments, building galacticas or mcmansions or starter castles. whatever you want to call them, bob toll, whose company builds more than 8,000 houses a year, calls them money in the bank. two-story entrance. is that sort of de rigueur now? >> well, it's the desire of most of our market to have a two-story entrance. >> this house, the hampton, is your best-selling model.

how does it compare with your best-selling model of, say, five or six years ago? >> well, five or six years ago, the best-selling model had about 3,200 feet in it. and the standard model of this has, i believe, about 4,600 feet. >> well, how do you account for it? >> families making over $100,000 have increased six times faster than the growth in population. >> the typical customer is a family of 3.6 people... who must have five bedrooms, five bathrooms, kitchen, dining room, living room, family room, study, conservatory, and, just to give you some extra room to, say, swing the cat, a nameless room simply called a bonus. paul knox, the dean of architecture and urban studies at virginia tech, sums up the endless tracts of overweight houses as a new national suburb he calls "vulgaria."

but, of course, you know, vulgar is in the eye of the beholder. >> exactly. my use of the term has to do with the ensemble. i dare say that this is a landscape not of homes but of funeral homes. >> coming up, what's a home without a dome? >> what do people say when they first come into this place? >> they're pretty amazed by the dome more than anything else. you know, they walk in, and you can't see it right away, and then they see the dome, and they go, "wow, i've never seen anything like this." so that was kind of the wow factor, you know, that we wanted. >> everything's bigger in texas next on 60 minutes on cnbc.  [ donovan ] i hit a wall.

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feed your lawn. feed it! my dad and grandfather spent their whole careers here. [ charlie ] we're the heartbeat of this place, the people on the line. we take pride in what we do. when that refrigerator ships out the door, it's us that work out here. [ michael ] we're on the forefront of revitalizing manufacturing. we're proving that it can be done here, and it can be done well. [ ilona ] i came to ge after the plant i was working at closed after 33 years. ge's giving me the chance to start back over. [ cindy ] there's construction workers everywhere. so what does that mean? it means work. it means work for more people. [ brian ] there's a bright future here, and there's a chance to get on the ground floor of something big, something that will bring us back. not only this company, but this country. ♪ a living, breathing intelligence teaching data how to do more for business. [ beeping ] in here, data knows what to do. because the network finds it

and tailors it across all the right points, automating all the right actions... [ beeping ] ...to bring all the right results. it's the at&t network -- doing more with data to help business do more for customers. ♪ >> vast ornate houses are nothing new in america or anywhere else. rich families like the vanderbilts brought ostentation to a new level, and the hearst castle, san simeon, left little doubt about who was in charge. but it's the sheer magnitude of this demand for ever-larger living space that is changing

the face of america. in texas, big has always been beautiful. but just outside houston, robin beisswanger finds her new, rather modest 6,800-square-footer just about right for her, her husband and son, the ever-present coco, and her cat. were you after a particular theme or a particular architectural period? >> i just knew i wanted old world style, and it came to be that it was an eclectic mix of a lot of things. it's asian, italian, anything mediterranean. >> how many televisions do you have in the house? >> six. >> six. >> six, yeah. and believe it or not, we're not huge tv fans. >> and how many bathrooms in the house? [silence] >> seven. >> you had to count? >> yeah. i was thinking five bedrooms, the pool bath, and then the powder bathroom here. >> what's going on?

cornell economics professor robert frank has some thoughts. >> over the last 30 years, almost all of the income gains have gone to people at the very top of the income distribution, and so people at the top have been building much bigger houses. people who are just below the super rich, well, maybe they wanted to build bigger but were afraid it would be unseemly to do so. now there's this 70,000-foot monster above them. that clears the way for them to build 60,000 square feet. and so it trickles on down, one step at a time. >> to your neighbor, who doubles the size of his house. now your house is suddenly small, so you build a bigger one. it's kind of like an arms race, only it promises mutually assured expansion. >> it's exactly like a military arms race. one side buys bombs; so does the other. and then they're back where they started. the norm for what constitutes an acceptable house just changes. >> well, it's not exactly a small kitchen, is it? >> no, no. i'm a cook, so i built this kitchen for such.

wanted to make sure that i got all of the latest and greatest appliances, the range with the double oven. you have an oven here, two warming drawers, of course your microwave, and the double-wide subzero there. >> and how's this for double wide? billy and tammy brown built their 11,000-square-foot house outside of houston with an entranceway somewhere between the u.s. capitol and a good-sized mosque. what do people say when they first come into this place? >> they're pretty amazed by the dome more than anything else. you know, they walk in, and you can't see it right away. and then they see the dome, and they go, "wow, i've never seen anything like this." so that was kind of the wow factor, you know, that we wanted. >> that's just the opening wow. wow number two: a touch of old world charm for the billiard room cum tv room cum dry aquarium. and there's the kitchen... and the pool...

and their six-year-old daughter's bedroom, with bathroom and closet the size of two new york studio apartments. does this house feel big to you or just right? >> it's starting to feel just right now. when we first moved in, it felt really big, 'cause we came from a 4,000-square-foot house, and this is close to 11. but it's something we've always dreamed about. >> just about everybody who's ever built a house, when it's finished, they say, "if i'd only thought of 'x.'" what do you wish you'd done? >> enlarge my family eating area. >> bigger kitchen. >> a little bit bigger eating area in the kitchen. >> and for me, i wish i could have a little bit bigger gathering room so when we have, you know, parties, there's a bigger area here in the entrance where people, you know, could gather. >> chris sims, who built their house, is building an even bigger one around the corner, 15,000 square feet. how has the average house size

expanded since you started building houses? >> well, over the past 15 years or so, it used to be a 5,000-square-foot house was a large house. these days, that 5,000-square-foot structure has morphed into an 8,000-square-foot house. the 8,000-square-foot house, which used to be the extraordinarily large house, is now a 12,000- or 13,000- square-foot house. so i've seen the size of homes in this market grow by about 50% over the last 15 years. >> what are some of the more eccentric rooms that people have asked for? >> we've done beauty salons. we've done gift wrapping rooms. >> at another house down the street, the owner demanded a volleyball court-- indoors, of course. >> he likes to have all his buddies over, and they get a good game going. >> it has to be very high. >> high ceiling, yeah, 26 feet. >> [laughs] for the browns, the floors were the thing. >> the floors were a custom design that we had and we copied from a house,

the house in paris, the versailles house, and-- >> the palace of versailles. >> the palace of versailles, right. >> versailles, louis xiv's little weekend getaway. the bourbon kings may have been banished from france, but their legacy lives on, helping to market houses like the toll brothers' hampton with the versailles option. and while they may cook their freedom fries on industrial-strength stoves in houston, outside it is paris on the prairie. >> and this is the master bathroom. we-- >> [laughs] oh, my. it's practically three stories high. >> it's actually two stories. i started out by saying that i wanted a little bit of a high ceiling, and so this was actually my architect's idea. and i thought it was fitting, because the house is a french chateau style,

and it kind of reminded me of a tower. >> it's a little bit, what, roman or something. >> yeah, yeah. it--this kind of makes me feel as if i'm in an enchanted forest or something. >> since our report first aired, the home construction and real estate industries have been hit hard by the great recession. one casualty of the economic crash of 2008 has been the so-called mcmansions. the craze for building larger and larger homes has slowed down, replaced in 2009 and 2010 by a new house-building trend known as "smaller and smarter." but there was some good news for the disenchanted mr. bitz back in chevy chase, maryland. the construction moratorium ended, and he was able to tear down his little house and build one triple the size. well, that's our edition of 60 minutes on cnbc. i'm leslta